AFG Buy Recommendations and Their Sales Expectations

AFG Strong Buys and What’s Priced-in:

 

There are 20 firms in the S&P 500 that meet The Applied Finance Group’s (AFG) screening criteria to be considered a strong buy candidate. AFG’s screening criteria uses a set of proprietary variables that have consistently produced Buy and Sell recommendations that out and under perform their respective benchmarks.   A brief description of the variables and results are below:

 

Economic Margin - A corporate performance measurement that addresses the gaps in GAAP, eliminating distortions caused by accounting policies to measure what a company is truly earning above or below their cost of capital. 

 

Valuation Model – Using AFG’s modified discounted cash flow model to measure the intrinsic value of a firm compared to their peers. 

 

Management Quality – Access management’s ability to make wealth creating decisions.

 

Although AFG’s Buy criteria is only used as a starting point and a way of narrowing your list of constituents it has proven to identify firms that are more likely to out-perform. This group of 20 companies has the characteristics of companies that make for good investments and are worth taking a more in-depth look to more accurately determine if the company will create shareholder value.

 

The chart below lists the 20 companies that met the screen criteria along with the implied sales growth expectations the company would have to meet to be fairly valued at the current trading price.